Russia settles last Soviet debt

Russia settles last Soviet debt

MOSCOW - Agence France-Presse

More than a quarter of a century after the Soviet Union collapsed, Russia on Aug. 21 announced it had settled the last foreign debt it had inherited from the Soviet era.

In a statement, the finance ministry said the government had paid Bosnia $125.2 million (106.01 million euros), which was due under trade deals between the Soviet Union and another now-defunct state, Yugoslavia.

“On August 8 2017, the Russian Federation settled the debt with Bosnia-Hercegovina,” the ministry said in a statement.

“Bosnia-Hercegovina was the last foreign state creditor of the former USSR... for which the debt was still outstanding.”

Russia and Bosnia signed an agreement to settle the debt in Moscow on March 21, it said. The deal took effect on July 20.

Russia assumed the entire foreign debt of the Soviet Union after it dissolved on December 26 1991 and its remaining republics became independent.

The debt was estimated at around $70 billion, most of which was accumulated during the final six years of the Soviet regime.

In 1998, Russia was forced into a humiliating default on debt repayments after the contraction of its economy in the early post-Soviet years.

But in 2006, bolstered by a windfall in oil and gas prices, Russia reimbursed more than $20 billion in advance to 17 creditor countries in the Club of Paris group.

President Vladimir Putin has placed a big emphasis on maintaining strong state finances, despite the two-year-long impact on the Russian economy from western sanctions over Ukraine and a fresh slump in oil and gas prices.